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« Muni Round-Up: Upstate New York, Long Island, Rhode Island | Main | The Meme of Publicly Owned Muni-Fi Resurges »

January 17, 2007

Wayport Reports 14m Connections in 2006

The largest hotspot infrastructure operator says they've had 30m paid connections ever, 14m in 2006: In a press release that's not yet online, Wayport trumpets some numbers. They now operate 13,000 hotspots worldwide, with the majority (my words, not theirs) comprising McDonald's locations (direct contract), and locations they manage for AT&T FreedomLink, such as at the UPS Store.

The math is interesting, though, as 14m divided into 13,000 locations means just over 1,000 connections per location or three per day on average. Now some locations will be very high traffic, which means that many hotspots might see no more than one connection per day. And the settlement rate for roaming runs from 50 cents to $2 per connection, from what I have been told over the years. So 1,000 connections, even with a healthy proportion of walk-up $7 to $12 per day rates, might mean only $2,000 to $4,000 in revenue.

But that's me being pedantic. Why? Because it's irrelevant for most of their locations how many connections are made. Really? Let me explain.

McDonald's, which represents 8,000 of the 13,000, uses the Wi-Fi and Internet network for its own purposes, which they are apparently happy with to judge by public comments and the deal's ongoing nature. Incremental business is great, but a few additional daily users is icing on the connectivity cake.

A few thousand other locations are operated on behalf of AT&T FreedomLink, a firm that uses its network as an additional incentive to its DSL customers to remain DSL customers. For $2 per month, AT&T DSL customers gain access to McDonald's locations and AT&T FreedomLink home network hotspots. (Wayport's hotels and other locations add $20 per month for use.) This, again, means that daily sessions and actual revenue is relatively uninteresting as opposed to customer loyalty and a long-term strategy. Further, AT&T has several airport locations which would produce session usage and walk-up fees orders of magnitude higher than a UPS Store outlet.

This leaves Wayport's 1,000-odd hotels and other properties, in some of which, Wayport is paid by the hotel (such as Wyndham) to provide high-speed Internet access at no cost to its loyalty-program guests.

So those 14m sessions in 2006? Less important on a per-location basis and more important as a measure of overall usage across the networks that Wayport runs.